Thanks to PRISM, U.S. companies may need local servers in India

Indian tech companies are urging their government to force popular American websites, from Facebook to Google, to set up shop locally—a direct response to revelations last week that a secret program enabled the American government to spy on foreign citizens through popular US-based Web services.

Specifically, the members of India's Internet Service Providers Association want U.S. companies to establish local servers, that way protecting Indian data from the snooping eyes of the US National Security Agency.

“Quite a few Internet companies... have expressed their deep concern of their customers," Rajesh Chharia, the organization's president, told Business Line. "The members want us to take immediate measures such as insisting upon Indian users’ privacy to be protected from any such misadventure of any intelligence departments.”

If the Indian government follows through on these recommendations—and if other countries follow its lead—it will surely represent an expensive consequence for any company taking part in the program, known as PRISM. European politicians have already suggested that PRISM violates EU laws.

"In principle EU law does not allow for data to be transferred to the U.S.," Sophie in 't Veld, a Dutch Member of European Parliament told the Daily Dot on Friday. "The Prism story is only one of many of massive U.S. spying on people both inside and outside the U.S. I hope this case will serve as a wake up call."